9 November 2007
Media release – for immediate release
Sound asset quality and a strong strategic agenda drive an excellent result
for Bank of New Zealand
Bank of New Zealand delivered a strong financial performance with underlying cash earnings of $605 million, an increase of 15 per cent year-on-year.*
Highlights for 2007 include:
• Bank of New Zealand headline profit of
• Strong performance across all business units
• Bank-wide net interest margin 2.39 per cent, down 6 basis points over 12 months
• Bank cost to income ratio at 44.1 per cent, down 3.5 per cent
• Continued commitment to Corporate Social Responsibility
Bank of New Zealand’s two main operating
• NZ Banking including Retail, Agri and Business banking; and
• Corporate and Institutional Banking.
Both divisions have had an excellent year.
• NZ Banking posted strong underlying pre-tax
cash earnings*, up 16 per cent year-on-year, driven by
disciplined cost management and profitable volume growth,
with lending volumes up 12 per cent and deposits up 9 per
• A competitive marketplace has seen net interest margin contract 12 basis points to 2.45 per cent.
• A disciplined focus on simplification and continuous improvement of processes throughout the business has driven significant sustainable cost benefits.
• Agribusiness has streamlined operations to provide better client service and has increased market share to a 2007 high of 18.3 per cent. The launch of AgriCapital offers customers new capital solutions including debt and equity, as well as tailored products for capital intensive sectors and large scale projects.
• Business banking saw continued growth in the more sophisticated lending product areas of Asset Finance, Debtor Finance, Property Finance and Leveraged Finance. An experienced team continue to deliver excellent client service and a tailored approach to managing customer needs. A strategic focus on SME’s has driven strong results.
CEO Cameron Clyne said, “Bank of New Zealand operates off a solid financial base, offering a AA Standard & Poor’s rating and with a focus on maintaining sound asset quality.
“The benefits of our size and global reach, and a quality asset base, are evident in the current market. We will continue to focus on a strategy of profitable volume growth. We won’t be chasing market share at any cost”.
• Product innovation, higher staff
engagement and the simplification of processes has resulted
in record high customer satisfaction scores.
• BNZ Customer Contact Centre has won the ‘Top Call Centre in NZ’ Award for the 4th year running.
• BNZ scooped an Effies Award for advertising effectiveness with the campaign driving the highest awareness ratings in over ten years.
• Continued commitment to Corporate Social Responsibility principles saw the introduction of 2 days volunteer leave per annum for staff, and a successful Get Organised Event for Preventing Violence in the Home. The new building at 80 Queen Street has been awarded one of New Zealand’s first 5 Star Green ratings, the result of combined efforts between developer Multiplex and the BNZ.
• The launch of the BNZ Customer Careline, an early intervention device for customers experiencing financial stress, has underpinned the Bank’s responsible lending platform.
• A strategy for attracting and retaining talent saw the launch of several initiatives including MyWellbeing, a national programme of free health checks, followed by a roll out of online interactive health programmes, and workshops across the country.
• Bank of New Zealand continues to develop the leadership potential of all managers, with more than 450 completing customised leadership training during the year, up from 274 the year before.
Corporate and Institutional Banking
• The BNZ
Corporate and Institutional Banking team posted a very
strong result with pre-tax underlying cash earnings* up 30
per cent year-on-year with revenues up 21 per cent to $265
• The result was underpinned by an excellent performance from the Markets division and the continuing success of the rapidly expanding Corporate Finance team.
Anthony Grayson, General Manager of Corporate and Institutional Banking said, “Through our connection with nabCapital’s global business we have been able to deliver competitive client solutions including new Corporate Finance products we have not previously offered our clients locally.
“Our experienced personnel in Markets have also been able to generate increased revenues via excellent client service, research and trading especially on the back of recent volatility. This team approach together with an improved product and risk approval process has driven greater “speed to market” solutions for our clients.”
Note : * underlying cash earnings exclude discontinued operations and IFRS fair value adjustments